Good News for the Housing Market: Mortgage Rates Drop and New Listings Rise
This week, there have been several positive developments in the housing market, providing hope and relief for homebuyers. Here are the key highlights:
Mortgage Rates Hit a Record Low
The daily average mortgage rates have dropped to 6.82%, the lowest level since May. This marks the first time rates have dipped below 7% since July. The Federal Reserve’s recent announcements of potential interest rate cuts have contributed to this decline. Experts predict that mortgage rates may drop further to the mid-6% range in 2024.
Mortgage Payments Decrease
As a result of declining mortgage rates, mortgage payments have reached their lowest level in eight months. The median monthly housing payment currently stands at $2,503, down $233 from the previous record high in October.
Homebuyers Return to the Market
The drop in costs has encouraged homebuyers to jump back into the market. Mortgage-purchase applications have surged by 19% since their low point in November. Additionally, Redfin’s Homebuyer Demand Index has increased by 3% over the past month, indicating a growing interest in homebuying services.
Prices Rise as Supply Struggles to Meet Demand
The median U.S. home-sale price has seen a year-over-year increase of 4.5%, the largest jump since October 2022. However, these rising prices are a result of the supply-demand imbalance. While new listings have risen by 8% compared to the previous year, the total number of homes for sale remains down by 5%.
Key Housing Market Indicators
Here are the latest indicators that provide insights into homebuying demand and activity:
| Indicators | Recent Change | Year-over-year Change | Source |
|---|---|---|---|
| Daily Average 30-Year Fixed Mortgage Rate | 6.82% | Up from 6.39% | Mortgage News Daily |
| Weekly Average 30-Year Fixed Mortgage Rate | 7.03% | Up from 6.33% | Freddie Mac |
| Mortgage-Purchase Applications (Seasonally Adjusted) | Up 4% from a week earlier | Down 18% | Mortgage Bankers Association |
| Redfin Homebuyer Demand Index (Seasonally Adjusted) | Up 3% from a month earlier | Down 7% | Redfin Homebuyer Demand Index |
| Google Searches for “Home for Sale” | Down 9% from a month earlier | Essentially unchanged | Google Trends |
| Touring Activity | Down 36% from the start of the year | At this time last year, down 43% from the start of 2022 | ShowingTime |
U.S. Housing Market Highlights
The following data provides an overview of the U.S. housing market for the four weeks ending December 10, 2023:
| Metrics | Four Weeks Ending December 10, 2023 | Year-over-year Change |
|---|---|---|
| Median Sale Price | $364,535 | 4.5% |
| Median Asking Price | $368,247 | 5.7% |
| Median Monthly Mortgage Payment | $2,503 at a 7.03% mortgage rate | 12% |
| Pending Sales | 58,532 | -7.8% |
| New Listings | 57,866 | 7.6% |
| Active Listings | 844,170 | -5.4% |
| Months of Supply | 4 months | +0.2 pts. |
| Share of Homes Off Market in Two Weeks | 29.7% | Up from 28% |
| Median Days on Market | 36 | -3 days |
| Share of Homes Sold Above List Price | 26.2% | Up from 24% |
| Share of Homes with a Price Drop | 5.3% | +0.4 pts. |
| Average Sale-to-List Price Ratio | 98.7% | +0.5 pts. |
Metro-level Highlights
Here are the metro-level highlights for the four weeks ending December 10, 2023:
| Metros with Biggest Year-over-year Increases | Metros with Biggest Year-over-year Decreases |
|---|---|
| Anaheim, CA (19.2%) | Austin, TX (-5.3%) |
| Fort Lauderdale, FL (14.9%) | San Antonio, TX (-3.3%) |
| Newark, NJ (14.6%) | Houston (-1.7%) |
| New Brunswick, NJ (11.5%) | |
| Miami (11.2%) | |
| * 3 metros experienced a decrease in median sale price | |
| Milwaukee (3.3%) | Cincinnati, OH (-22.2%) |
| Fort Worth, TX (1%) | Providence, RI (-15%) |
| Chicago (0.3%) | New York (-13.8%) |
| * 3 metros experienced an increase in pending sales | |
| Phoenix (24.4%) | San Francisco (-23.7%) |
| Orlando, FL (21.1%) | Atlanta (-14.5%) |
| Miami (18.6%) | Oakland, CA (-7.4%) |
| Fort Worth, TX (13.6%) | Seattle (-5.7%) |
| Las Vegas (13.1%) | Indianapolis, IN (-4%) |
| * 15 metros experienced a decrease in new listings | |
These positive developments in the housing market indicate a growing opportunity for homebuyers. For a detailed explanation of the metrics used in this report, refer to our metrics definition page.